TOO
COSTLY, too optimistic, and wholly unnecessary. That deconstruction
of President Bush’s plan to privatize Social Security comes from
the co-director of the Center for Economic and Policy Research in Washington.

In a talk to students last March, Dean Baker, who was joined on the podium
by U.S. Rep. Chaka Fattah (D-PA), said there is no reason to reform the
system at this time.

“Social Security is not broke,” said Baker, head of the nonpartisan
think tank. “The program is pretty sound by any reasonable measure.”
In fact, he cautioned, privatization could well weaken Social Security,
adding that it will spawn administrative costs of 5 cents on every dollar
(compared to 0.6 cents of every dollar at present) and likely generate
much less in returns to stock market investors than proponents of privatization
contend.